New mortgage rules could mean fewer choices

MGN Online
Thursday, December 5, 2013 - 11:28am

A new Commerce Department report says the sales of single family homes jumped a whopping twenty-five percent from September to October, and twenty-two percent since last year.

People may feel better about home-buying because the economy is bouncing back, but mortgage rates are about a point higher than they were just this spring.

New laws require banks to make sure mortgages are affordable to consumers, and the rules will make compliance a lot tougher on some of the smaller banks. That may make some of those small banks drop out of the marketplace for mortgages altogether.

The rules are set up to restrict banks from lending to anyone whose debt payments would be more than forty-three percent of their income. The CEO of online mortgage lender, Loan Depot says banks will have to update their procedures and technology and retrain their staff. On top of that, small banks are hiring more lawyers to make sure they're compliant.

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